The House yesterday approved an ambitious plan to rescue hundreds of thousands of homeowners at risk of foreclosure by helping them trade exotic loans with rapidly rising monthly payments for more affordable mortgages backed by the federal government.

Bucking a White House veto threat, 39 Republicans joined Democrats in supporting the bill, the centerpiece of a broader housing package that represents Washington’s most aggressive response to the nation’s housing crisis. The measure aims to unfreeze mortgage markets by expanding the Federal Housing Administration’s reach and strengthening mortgage giants Fannie Mae and Freddie Mac. It also would create a $7,500 tax credit for first-time home buyers to try to boost sales and slow plummeting home prices.

GOP House leaders blasted the bill as a bailout for speculators and irresponsible borrowers. But the measure, sponsored by House Financial Services Committee Chairman Barney Frank (D-Mass.), gained strong support from rank-and-file Republicans worried that escalating foreclosures are ruining lives and decimating neighborhoods.

Despite President Bush’s condemnation of the bill this week, White House officials seemed to leave the door open to negotiation. And key Republicans are working with Democrats on a similar plan in the Senate.

‘People are in a world of hurt. My sense is there’s maneuvering room,’ said Rep. Fred Upton (R-Mich.), whose state has been among those hardest hit. ‘There’s still a good chance they’ll get a bill the president can sign, knowing that a lot of the country needs help.’

More than 1.2 million homes are in foreclosure, and an additional 3 million are forecast to join them over the next two years. Home prices have fallen more than 10 percent, and state and local tax collections are suffering. Polls show the economy is the top concern among voters, with one in four respondents saying they have been directly affected by problems in the housing market.

The borrowers most at risk of foreclosure — and who have drawn policymakers’ attention — are those who have fallen behind on their mortgage payments but cannot sell or refinance because the value of their homes has fallen so far that they owe more than their homes are worth.

The Bush administration has tried to help such borrowers by urging banks to reduce their mortgage debt. The administration also has eased eligibility standards so borrowers who have missed a few payments can qualify for cheaper loans insured by the federal government through the FHA. But those initiatives have helped relatively few families.

Frank’s proposal calls for the FHA to respond more aggressively, by offering to insure mortgages for even the least creditworthy borrowers if their banks will forgive a portion of the debt and help them stay in their homes. Under the proposal, lenders would have to take a significant loss, permitting borrowers to pay their original loans with new loans worth no more than 90 percent of their homes’ new, lower value. Extra fees charged by the FHA would lower the payoff to lenders to 85 percent of a home’s current value.

Borrowers would get lower monthly payments and an immediate equity stake in their property. If home values rise, the plan requires homeowners to share their profits with the federal government when they sell or refinance.

The Congressional Budget Office estimates that as many as 500,000 homeowners will benefit from the program. But more than a third of those borrowers are likely to default, the CBO estimates, forcing the FHA to pay off their loans and take possession of their property at a cost to taxpayers of $1.7 billion.

The White House has balked at that price tag, calling Frank’s bill an ‘attempt to shift costs to taxpayers [that] constitutes a bailout.’ But there are signs that the administration is open to compromise.

In a speech Monday, Federal Reserve Chairman Ben S. Bernanke appeared to endorse Frank’s plan. Treasury Secretary Henry M. Paulson Jr. and other administration officials have spoken favorably of it. On Wednesday, even as Bush declared his intention to veto the measure, one of his top economic advisers told the Wall Street Journal that differences between the White House and congressional Democrats were not ‘insurmountable.’

Yesterday, White House spokesman Tony Fratto said Bush supports the concept of Frank’s plan. ‘As a basic concept, it’s what we’re already doing. But it’s what we’re doing on steroids,’ he said.

‘Is it possible to have additional housing legislation? Yes, it’s possible. And maybe the Frank bill could change so much that there could be legislation we could accept,’ Fratto said. ‘But I think we’re far away from that.’

In House debate, many Republicans echoed the administration’s concerns. Minority Leader John A. Boehner (Ohio) said Frank’s bill would ‘bail out scam artists and those who were speculating in the market, and they want taxpayers to pick up the tab.’

But other Republicans cringed at the indictment of troubled borrowers and said they were disappointed by the veto threat.

‘What’s offensive is some of the rhetoric,’ said Rep. Steven C. LaTourette (R-Ohio), who voted for the measure. ‘They say it rewards speculators. No, it doesn’t. It’s limited to homeowners. They say it’s a $300 billion bailout. No, it’s not. It costs $1.7 billion.’

‘Would I have written the bill the way Chairman Frank did? No, but we’re not in charge anymore,’ LaTourette said. The housing mess ‘calls for some bold action. People are expecting us to do something.’

The House voted 266 to 154 to approve Frank’s rescue plan and a broad array of other housing initiatives. The House also voted 322 to 94 to approve an $11 billion package of housing tax measures, including the $7,500 credit for first-time buyers who purchase a home this year. Under the measure, the credit would have to be repaid to the government over 15 years.

The package moves to the Senate, where Banking Committee Chairman Christopher J. Dodd (D-Conn.) and the committee’s senior Republican, Richard C. Shelby of Alabama, are working on a similar proposal. Senate Republicans have been more resistant than their House counterparts to broad plans to intervene on behalf of distressed homeowners.

But Francis Creighton, vice president for government affairs at the Mortgage Bankers Association who is working with both the administration and Congress to slow the rate of foreclosures, said he expects a compromise to be reached.

‘We believe the administration is as committed to addressing this situation in the market as anybody. There’s still a lot of time for negotiation,’ Creighton said. ‘Everyone wants to support something that can fix the housing crisis.’